To stay competitive in an unpredictable economic climate, your business must have the ability to adapt to leaner budgets without disrupting operations. If you are low on funds, a flexible lease arrangement with your vehicle rental provider is essential to remain profitable. Unnecessarily paying for underutilized vehicles is money down the drain. For project-based contracts such as special events or seasonal activities, a short-term lease may offer a more cost-effective solution. We’ve listed the advantages and disadvantages of a short-term lease to help you decide if it makes sense for your business requirements.
Advantages of short term vehicle lease
- Frees up capital. You’ll only have to pay for rentals when needed freeing up funds for other areas of your operations. This kind of flexibility allows your fleet to expand and contract based on demand. Short-term lease contracts can be arranged from one to twelve months in length.
- Provides flexibility when you have new employees undergoing a probationary period or during temporary peak seasons.
- Less downtime due to maintenance or repairs. Most short-term lease vehicles do not require any servicing or maintenance as long as the car or truck was not damaged and stays within the agreed mileage. Short-term lease vehicles are less likely to breakdown since each vehicle is thoroughly checked and serviced before being released to a new customer. You can be assured that it is in good working condition.
- At the end of the lease period, you are expected to return your vehicle in the same state you got it. The longer you lease a vehicle, the higher the possibility that it will show signs of deterioration or damage, even if you take good care of it. But with a short-term lease, you are more likely to return the vehicle in the same condition you received it avoiding fines related to excessive wear and tear.
- You have the option to upgrade to a newer model as soon as the lease expires. If you find that the vehicle you leased no longer serves your needs, you can easily choose other alternatives. If you are particular about getting the latest tech innovation or safety features as soon as they are made available, a short-term lease may be more appropriate for you.
- With a short-term lease, you can avoid paying a large initial deposit. You don’t need to prove that you have a high credit threshold. This is a good option if you have bad credit or you are short on cash.
- You are not tied to a longstanding commitment. If you need to get out of the contract, you don’t have to pay the penalties tied to breaking a long-term agreement.
Disadvantages of short-term vehicle rental
- The main disadvantage of a short-term lease is having to pay higher monthly fees, making it more expensive in the long run. Unlike long-term lease contracts, rental companies usually don’t offer promotions for short term lease vehicles.
- Lease contracts have a limit on miles you can travel with the vehicle. Long-term lease agreements may offer a greater mileage allowance than what is available for short-term lease contracts.
- If you opt for a short-term lease, you miss out on the opportunity to improve your credit score. Consistent payments towards a long-term lease can strengthen your credit rating.
As with any lease contract, be sure to read the fine print on mileage limitations and wear and tear policies. Every rental provider is different, so do shop around. You wouldn’t want to pay hefty fees for a car or truck that you will only drive for a few months.
Thomas Solutions offers straight truck rentals in Ontario. Contact us at 1-877-479-1388 or email firstname.lastname@example.org for your truck or fleet rental and maintenance needs. With a fleet of over 800 vehicles and growing, Thomas Solutions has a wide array of straight trucks and work vehicles for lease or rent. We service all of Southern Ontario from our locations in Hamilton, Selkirk & Niagara, as well as through our growing list of service partners.